Slower Growth, Booming Trade, Declining Births: Armenia in 2024

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ArmStat, Armenia’s statistics agency recently released its annual report on a number of socio-economic metrics. Following two years of strong economic growth, the economy expanded further, albeit at a slower pace. Foreign trade soared, while inflation and the exchange rate with the U.S. dollar remained stable. In line with global trends, birth rates declined significantly.

Economy

Driven by the impact of the Russian invasion of Ukraine, Armenia’s economy grew by 12.6% in 2022, the first double-digit GDP expansion since 2007. Growth remained strong through 2023, at 8.3%. While final figures for 2024 are not yet available, the Central Bank estimates that economic growth in 2024 stood at 6%. The World Bank sees further slowdown of the Armenian economy with expected growth of 5% in 2025 and 4.6% in 2026.

Domestic commerce grew by 17%, construction by 15%, services by 11%, manufacturing by 5%, while agriculture grew just by 2%. The tech sector continued its impressive rise, expanding 14.5%. But this is greatly reduced from the 76% growth in 2022 and 52% in 2023, but more in line with the 2021 figure of 17.8%, before the significant influx of Russian tech workers and companies prompted by the Ukraine war. The banking sector grew 19.5%, while gambling and betting activities by 13.6%.

Manufacturing growth stood at 4.7%. The production of base metals expanded by 38%, followed by cigarette production at 13%, and food production at 6%. Production of beverages declined 4%, while the country’s large mining industry contracted by 9%.

International Trade

Armenia’s foreign trade in 2024 stood at a whopping $30 billion, up 42% from the previous year’s $21.3 billion. Exports stood at $13 billion with imports at $17 billion.

Trade with Russia, the largest trade partner, has grown nearly five-fold in three years, from $2.6 billion in 2021 to $12.4 billion in 2024. In the same period, Russia’s share grew from 31% to 41%. Meanwhile, trade with EU countries has seen a dramatic decrease from 19% in 2021 to 8% last year.

Trade with the UAE saw remarkable growth, more than doubling from $2.3 billion in 2023 to $5.3 billion last year. That country maintained its position as Armenia’s second-largest trade partner, accounting for nearly 18% of the total.

Much of the growth was driven by the continued expansion in the trade of precious and semi-precious stones and metals, which rose from almost $6 billion in 2023 to $15.4 billion last year. Just three years ago, it accounted for less than $600 million. Data from the first two quarters of 2024 shows that this category includes primarily gold, jewelry, diamonds, silver and platinum, which are mostly imported from Russia and re-exported to other countries, especially the Emirates.

Finances

Inflation, as measured by the Consumer Price Index (CPI), remained low at 1.5% in December 2024 compared to the previous year. The index of food and non-alcoholic beverages increased by 2%, while alcoholic beverages and cigarettes by 3.8%. Clothing and footwear declined by 2.6%, while housing and utilities declined by 0.2%.

The exchange rate of the U.S. dollar against the Armenian dram remained largely stable through 2024. It fluctuated between 387 and 405 AMD for 1 USD, averaging at 392.7, essentially the same as last year. A dollar could buy 504 drams back in 2021.

Unemployment, Poverty and the Labor Market

As of December 2024, Armenia’s employed workforce reached a record high of 783,906, up from 745,207 the previous year and 585,352 in 2018. This surge reflects significant progress in curbing the informal economy.

The sectors with the most employees are commerce/retail (134,849), education (128,033), manufacturing (90,850), healthcare and social services (53,404), tech and communications (45,610), construction (42,011), hospitality (39,978), public administration and defense (35,151). Mining, a key sector of the economy, employs a relatively modest workforce of 12,311.

The average monthly gross salary for all employees was 291,061 drams ($734). The highest-paying jobs in Armenia are in finance (1,286,422 AMD or $3,244), tech (1,015,249 AMD or $2,560), and mining (821,133 AMD or $2,070).

In Q3 2024, unemployment stood at 13.3% (185,600 people), up slightly from the 12% a year earlier. Poverty in 2023, the latest available, stood at 23.7% as measured by consumption per adult below 53,590 AMD ($136.50) per month.

Demographics

The 2022 census found that Armenia’s permanent population, which also counts temporarily absent people, was 2,932,731, while the actual resident population stood at 2,689,438. Largely due to the influx of more than 100,000 forcibly displaced Armenians from Nagorno-Karabakh (Artsakh) in 2023, the permanent population has grown and is now estimated at 3,075,800.

Last year saw the lowest number of births in more than two decades, at 33,648. It is the lowest since 2002 and significantly lower from the recent highs of more than 44,000 in 2009 and 2010. Deaths in 2024 stood at 25,576, which is most comparable to 2002.

2024 saw negative net migration, based on the difference of arrivals and departures, of 4,212 people, compared to the out-migration of 29,494 in 2023.

Tourism

In 2024 Armenia’s tourist arrivals stood at 2.2 million, again surpassing the pre-Covid record high of 1.9 million in 2019, but slightly lower than the previous year’s all-time record high of 2.3 million. Russian nationals accounted for 42.2% of the total, followed by Georgian citizens (12%), Iran (8%), the U.S. (3%), India (2%), China (1.5%), and Germany (1.3%). Tourist arrivals from Russia declined nearly 18%, while arrivals from Iran grew by the same percentage. Nearly 25% more Indians visited Armenia and 65% more Chinese.

Baby Names

The most common names given to baby girls and boys last year were Nare, Luse, Arpi, Maria, Yeva and Davit, Narek, Hayk, Areg, Mark, respectively.

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